The growing rate of urbanization and the need to improve quality of life in a city environment propelled the Government of India to start focusing on the smart cities concept. The current government in India, spearheaded by the Prime Minister, Narendra Modi, has announced its plan to set up 100 smart cities across the country. This opens up a huge opportunity in each aspect of smart city planning, project execution and management. There is great potential for technology businesses in this growing market. Furthermore, there are benefits to Indian cities and citizens by deploying smart solutions. This in turn would open up the entry opportunity for companies across the globe with a market in India and provide them with a platform to export their services.

With respect to verticals, the government needs to take a lead in removing barriers to innovation and facilitating collaboration between multiple diverse sectors. This has already begun to happen in the Assisted Living and Transport verticals, but more needs to be done. Along with the many stakeholders involved, each smart city project is also driven by a variety of factors. Powerful forces are converging to make smart cities a growing trend all around the world. It is valuable for city administrators to understand the factors behind this momentum and how it will play out in their region.

Given below are some of the key factors that are driving the governments/businesses in India to invest in smart cities:


Rapid Urbanization Rate in India
Urban India has been experiencing a steady increase in the share of its urban population, emergence of new cities or towns, sizeable contribution to the country’s national income, reduction of poverty, increasing inequality, and lower level of inclusive growth.


Ageing Infrastructure
Developing countries, including India, are facing a major challenge with respect to the age and condition of their infrastructure. This need to address ageing infrastructure is both a growth driver in the Indian smart city space and an opportunity for the improved management of resources.


Need for Improved Quality of Life in a City Environment
Starting with poor predictability in transportation to increasing demand in public utilities and services, living in an urban environment can be quite challenging for most individuals, impacting the quality of life. Hence, this drives the smart cities market in India where the population is growing at a rapid rate.


Drive to Achieve Competitive Advantage and Improve Economy
The need to gain competitive advantages, such as optimization of capacity, reduction of lead time and cost, and increased profits, through the development of advanced infrastructure is a major factor propelling the market.


Increasing Adoption of Advanced Technology Solutions
India has witnessed robust growth in adoption of innovative technology solutions such as NFC, RFID, and other solutions that fall under the umbrella of IoT. Such optimism indicates a sense of confidence in India’s regional economic performance, and the need to integrate better technology into the cities.

In addition, continuous advancements in current technologies will aid in the transformation of existing cities into smart cities. Specifically, advancements in machine-to-machine (M2M) communications, the Internet of Things, and wireless sensor networks will play a large role in city success. M2M communications will enable multiple applications and services, allowing the smart city to become a successful reality. Public and private organizations can use M2M technology to obtain key information, allowing them to gain better insight into the needs and wants of their community.

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